Hi I'm new here and this is my first post . I am currently running a PPC campaign with a smaller vendor who has historically produced very good results for us, i.e. giving up is not an option and the more traffic we can get from them the better

Unfortunately I am stuck in a bid war for first position...

I was wondering if anyone had a good strategy for winning a bid war - other than keep paying more or suspend the listing...

I would appreciate any advice that may help me get the-one-up on the competition

Yes, stop fighting that battle. Lay back for awhile and find other keywords that you can focus on that are not part of a bidding war. You may find that the person you are battling settles down as well, eventually lowering their bid and then you can start the whole crazy madness once again! In the meantime you may discover new keywords you have never thought of before that produce excellent ROI for you.

If you are talking about Yahoo, I would bid one cent less than the person ahead of you, especially if you are both way ahead of the 3rd place competitor. paying that much each time might get them to settle down and "play fair," and you'll only be paying 1 cent more than #3, regardless of your max bid.

Also, I have found #2 to be almost as high CTR as #1...have you studied this?

This is a small but specialised network, that produces a very high volume of clicks for us and the conversion rate stays very similar in position 1,2 and 3(which is not very standard behaviour). The only difference is that in position 1 we get a lot more clicks than in position 2 - about 50% drop and that is why we need to be on top - I’m guessing that is exactly why our competitor feels the same

Under any other circumstances I would just sit back in #2 as you, David and Chris, suggested.

Mugshot, to answer your question - they don't do anything else, other than PPC.

Well, I might just sit at #2 and try to improve the click through rate???

It sounds like there's less window-shopping because it's such a targeted network. I could see why traffic drops that much from #1 to #2. I like David Wallace's suggestion of looking at similar keywords that aren't getting heavy bidding.

It's really all about your cost per acquisition. If you can maintain a reasonable CPA, below your maximum, keep bidding for #1. The moment your CPA rises above the profitability line, then look elsewhere for a while.

It's the same reason why lawyer's are willing to spend $30-$40 a click for many of their keywords. They know that even if they get one lead in a thousand clicks, it will be probably be profitable. It comes down to tracking the costs, conversions and ROI.

Only way I know of to actually "win" a bidding war is to have the bigger budget (or cheat).

However, you can win *during* a bidding war simply through maintaining your profitability.

Don't know what your market is, but if the profit margin is similar between competitors -- immediately move to your upper limit so you get the most traffic you can while maintaining profitability. If competitors pay more to get higher in the results, then it's likely they won't be profitable and will eventually fall back to earth. If they have a "war chest" for this sort of thing, then it may take a while before they figure out they're spending too much for too little. As long as you're spending ad money on generating business, let your competitors spend their money on ranking #1.

Ultimately, I feel you will need both to diversify the PPC keywords, and to seek additional sources of traffic. Would you or your client prefer to fly in a single engine plane, or a plane with more options in case one of them goes bad?

A few years ago I watched the bid wars going on for top casino phrases (I was a making a profit as a middle-man at the time). What used to happen was that the bids would go up and up until one of them decided to stop fighting and bid a much lower price. Then the others would follow suit, and the battle would start over again from a more realistic level.

So if there are just 2 of you fighting, bid the lowest amount you can to get 2nd place. The other one will come down straight away, and you can bit for 1st place much more cheaply. You could try it if there are more than 2 in the battle. The others might see it and follow suit.

If in Yahoo/ Overture I find bidding 1 cent behind them especially with a big gap to the bid below yours will have them either bid 1 cent behind you or dropping down or out.

If they drop to a 1 cent below you, drop 1 cent behind them and if they do the same, keep it up and walk the bid price down to a reasonable level.

If they don't move you will bleed them out usually, while only paying 1 cent more than the bid below you.

This is amazing and something I have been studying as I have bids sitting at $4.99 for 2nd place and 3rd place is 25 cents..
You would be amazed at the amount of companies who pop in the keywords toss money at them and never check again.

I run lead campaigns as well as a publisher and they are typically for Fortune 500 corporations who are the worst at monitoring their bids.

A true case of the right not knowing what the left is doing, the marketing department sets up the campaigns and keywords, and leaves the payments to the Accounts Payable department who have no clue if the charges are justifiable or sensible, or why it's as high or low as the charges may be

Also 1 & 2 at the top of the free results listings work best for clicks, but 1.7 also does very well in CTR and conversion.

I have a client who I have most of their terms around 1.7 with CTR at 5.0% on average and conversion over 10% average, through all ad groups of which there are close to 50.

As Phil and Clint have said, reset the bidding war by bidding 1c below position 1. You can only stay in position #1 in a bid war if you have the budget to constantly stay above your competitor. If you must explain to a higher-up or client why you are sitting in position #2 instead of #1, show them the relevant CPC numbers between #1 and #2 plus your CPA and an estimate of the competitor's CPA (assume industry-standard conversion rates). With the money you save (especially if there is a huge gap in #1->#3), you can probably afford to spread that budget to other profitable keywords.

And yes, followup by improving your clickthrough rate through copy but don't forget to also improve your conversion rate!

There are actually a lot of bid management tools provided by 3rd parties that can automate position, CPA and ROI-based bidding. The nifty things that you can do with automated bid tools are worth a trial or two Finding large bidding gaps to exploit, always sitting above a specific competitor, always sitting at #1 under a certain max CPC etc...

There are actually a lot of bid management tools provided by 3rd parties that can automate position, CPA and ROI-based bidding. The nifty things that you can do with automated bid tools are worth a trial or two Finding large bidding gaps to exploit, always sitting above a specific competitor, always sitting at #1 under a certain max CPC etc...

KeywordMax and AtlasOnePoint are the first two that come to mind. AOP seems to built more for larger advertisers (i.e. more expensive packages) while KM works well for both top tier and low-end users. Both AOP and KeywordMax are well known for ruleset-based bidding - eg. AOP's cool sounding Max Bid Gap Jammer - which automatically moves your keyword max bid to one cent below your competitor. There are also products from Did-It, 24-7 Real Media (DecideDNA?) and many more... which I am unqualified to comment on since we've never used/trialled them.

This is a small but specialised network, that produces a very high volume of clicks for us and the conversion rate stays very similar in position 1,2 and 3(which is not very standard behaviour). The only difference is that in position 1 we get a lot more clicks than in position 2 - about 50% drop and that is why we need to be on top - I’m guessing that is exactly why our competitor feels the same

Under any other circumstances I would just sit back in #2 as you, David and Chris, suggested.

Mugshot, to answer your question - they don't do anything else, other than PPC.

Well, I might just sit at #2 and try to improve the click through rate???

Thanks again for the advice.

The other way to win a bidding war is to get the traffic for a lot less with a huge list of qualified keywords...

Use your keyword in the Overture suggestion tool and grab all the adjectives added to your keyword (qualifiers) this becomes your base... you can put all of those in phrase match in Google and standard match in Overture.... most of the time you will find the competition has not reached that deep and you can will appear aboive them for a much cheaper cost.

Yahoo automatically picks the exact matches first.... Google goes for the highest ECPC - the combination of CTR times Max bid. If you are specific you will get a higher CTR and thus can get better placement with a lower actual bid.

In Adwords write as many ads as you can using the keyword term once in title once in description.

This will improve your CTR and thereby increase your position without needing to increase bidding.

Find the high CTR rayes and high conversion rates and kick out the non performers this too increases CTR as the lower the amount of non performers the less your high percentages degrade.

In other words

1 keyword term converting at 20% is 20% CTR

1 Keyword term converting at 20% along with 4 others with no CTR = 4% CTR

20% divided by 5 = 4%

Again higher CTR will give you better positioning.

Opposed to the Cory Rudl school of marketing where those who cant simply try to teach expanding keyword selection to misspellings and barely related terms as well as idiot sounding searches such as "dot com dating web personals" and others will do nothing but drive up your time spent managing the campaign, adjusting ads to terms put on hold for not performing and trying to manage effective bidding.

Keep your keyword lists tightly intergrated and segragated.

If you run a campaign for Dating you would then categorize keyword terms into Ad Groups something like below.

Date

Dating

Friend

Friendship

Make New Friends

Share time

Meet Men

Meet Women

Find Relationship

Personal Ads

Inside each ad group keep the terms focused to the Adgroup Name.

Run each term to between 200 to 500 clicks, see whats performing kick out the non performers then look to add in other terms you haven't tried yet.

Weed them out again add more and measure.

Soon you'll have a core group performing nicely then it is time to work on testing even more ads. Ads do two things raise CTR and increase conversion.

Clint I agree be tight with terms but I would not go for broad on widgets when qualified will get you better and cheaper.

I also agree with the category development... I have used this approach for over 2 years and it has proven great for every aspect of PPC marketing - tighter keywords in tighter groups with tighter ads.

I would not use five different ads. Have pushed three (when I mentioned 4 above it was really 2 with different landing pages) but that was to try three different calls to action.

Clint I agree be tight with terms but I would not go for broad on widgets when qualified will get you better and cheaper.

I also agree with the category development... I have used this approach for over 2 years and it has proven great for every aspect of PPC marketing - tighter keywords in tighter groups with tighter ads.

I would not use five different ads. Have pushed three (when I mentioned 4 above it was really 2 with different landing pages) but that was to try three different calls to action.

We generally have 3 different ads per adgroup and rotate our worst performer on a regular basis. Our Google rep while not explicitly stating it, has mentioned that 3 ads per adgroup allows for maximum efficiency, just depends on how long you want to run the ads and how often you test new creative.